Cooke: Colorado to pay a hefty price for EPA carbon regs

Advocates for Colorado's "new energy economy" have spent a decade warning Coloradans that we must pass expensive energy mandates, fuel switching and demand-side management programs in order to "get ahead of the EPA."

It turns out the course of action pushed by the Public Utilities Commission, former Gov. Bill Ritter, and the anti-fossil fuel lobby was horrible, for which everyone in our state will pay a hefty price.

Under the Environmental Protection Agency's new state-level carbon goals, Coloradans will be punished for previous aggressive action to address global warming.

The PUC, Colorado Department of Public Health and Environment and the Colorado Energy Office complain about the proposed new regulations. "It appears that the EPA now proposes to require states that have realized early emission reductions to do more than states that have not," their official comments to the EPA state. "In other words, for states that have done comparatively less, it appears that EPA is expecting them to do less. This raises equity issues, including cost and reliability concerns."

The agencies argue that "Colorado's IOU (Investor Owned Utilities) ratepayers have already invested more than $4 billion for cleaner electric energy," more than $2,500 per ratepayer. This aggressive and costly policy earned the state zero credit from the EPA.

The purpose of the EPA's Clean Power Plan is to reduce states' carbon emission by 30 percent by 2030. The EPA employs what it calls "cooperative federalism." It sets the goal and gives each state four "building blocks," including coal-fired power plant efficiency, fuel switching to natural gas, wind and solar mandates, and demand-side management to reduce the amount of electricity used to meet the goal.

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Colorado's PUC, Health Department, and energy office question how the EPA determined the state's carbon goal and whether it is even achievable: "As proposed, the state goal is derived from extremely complex calculations that are based on numerous technical details and long-range projections that confer a high degree of uncertainty in determining whether the state goal is appropriate, realistic and attainable."

"EPA's goal for Colorado must be adjusted," the agencies demand.

Throughout the eight pages of comments they express additional concerns over feasibility, lack of flexibility, possible need for state level legislation, the "tight" timeline, and EPA technical errors.

Then there is a transmission line capacity issue. Current transmission lines cannot support power from both natural gas and wind. The agencies even take a stab at the Endangered Species Act regulations for limiting "recent efforts to expand transmission lines in the West. … Without the proper transmission lines, increased operation of turbines could cause reliability issues."

One glaring omission in the state's comments is any mention of costs associated with the new regulations. By the state's own admission, Colorado ratepayers already have paid a hefty price for the "new energy economy." Under the EPA's new regulations Colorado ratepayers will have to pay an additional 65 percent more for electricity, according to a report from Energy Venture Analysis (EVA).

Colorado residential ratepayers used to enjoy some of the least expensive electricity rates in the nation. Now they suffer some of the most expensive in the Mountain West. Under the new EPA regulations on carbon, "the average annual Colorado household electricity and gas bills will increase by more than $610 in 2020," writes EVA.

For all of the additional burden Colorado ratepayers will have to endure, what does the EPA expect? The EPA projects that the proposed rule will not result in "notable CO2 emission changes."

It's time to stop heeding bad energy advice.

Amy Oliver Cooke is executive vice president and director of energy policy for the Independence Institute, a Denver-based free market think tank.